Exhibit 99.1
Catalyst Semiconductor Reports 4th Quarter and Fiscal Year Results
SUNNYVALE, Calif.--(BUSINESS WIRE)--July 20, 2006--Catalyst
Semiconductor, Inc. (NASDAQ:CATS), a developer and marketer of
programmable and analog/mixed signal products used in
telecommunications, networking systems, computation, automotive,
industrial and consumer markets, today announced financial results for
its fiscal fourth quarter and year ended April 30, 2006.
For the quarter ended April 30, 2006, Catalyst reported net income
of $270,000, or $0.02 per diluted share, on net revenue of $14.2
million. This compares with net income of $516,000, or $0.03 per
diluted share, on net revenue of $16.3 million in the quarter ended
April 30, 2005. In the quarter ended January 31, 2006, Catalyst
reported net income of $864,000, or $0.05 per diluted share, on net
revenue of $14.4 million.
For the year ended April 30, 2006, Catalyst reported net income of
$2.6 million, or $0.14 per diluted share, on revenue of $60.2 million.
This compares to net income of $3.8 million, or $0.20 per diluted
share, in the previous year on revenue of $62.3 million.
Net revenue from analog/mixed signal products totaled $1,164,000,
or 8.2% of revenue, in the quarter ended April 30, 2006, compared with
$901,000, or 5.5% of revenue, in the quarter ended April 30, 2005 and
$1,123,000, or 7.8% of net revenue, in the quarter ended January 31,
2006.
Gross margin for the quarter ended April 30, 2006 was 34.9%,
compared to 37.9% for the quarter ended April 30, 2005 and 43.1% for
the quarter ended January 31, 2006. Several factors impacted the
fourth quarter margin compared to the previous quarter including a net
increase in reserve for excess inventory of $89,000, increased
overhead expenses of $146,000, as well as increased costs to
manufacture certain parts. In the quarter ended January 31, 2006,
Catalyst recorded a benefit from the sale of previously reserved
inventory of $280,000.
Gross margin for the year ended April 30, 2006 was 38.7% compared
to 42.5% in the year ended April 30, 2005. The decrease was due
primarily to the challenging pricing environment, particularly in the
serial memory line which represented approximately 58% of fiscal 2006
revenue. Catalyst continues to pursue product cost reduction programs
including transition to .35 micron products.
Research & Development expenses decreased $112,000, or 5.9%, to
$1.8 million for the quarter ended April 30, 2006 from $1.9 million
for the quarter ended April 30, 2005 and $108,000, or 5.7%, from $1.9
million for the quarter ended January 31, 2006. The decrease from the
prior year was due primarily to a decrease in costs for professional
services of $51,000 and a decrease of $45,000 in spending for
engineering equipment. The decrease from the previous quarter was due
primarily to a $114,000 reduction in employee compensation related
expenses.
Sales, General & Administrative expenses decreased $337,000, or
8.9%, to $3.4 million in the quarter ended April 30, 2006 from $3.8
million in the quarter ended April 30, 2005 and increased $163,000, or
5.0%, from $3.3 million in the quarter ended January 31, 2006. These
periodic fluctuations resulted partially from the level and timing of
costs attributable to Sarbanes-Oxley related expenses.
Catalyst recorded an income tax benefit of $216,000 during the
quarter ended April 30, 2006 compared to income tax provisions of
$218,000, or a tax rate of 29.7%, in the quarter ended April 30, 2005
and $539,000, or 38.4%, in the quarter ended January 31, 2006. The tax
benefit recorded for the quarter ended April 30, 2006 was attributable
to expiry of the statute of limitation and resulted in an effective
tax rate of 28.5% for fiscal 2006. The tax rate in the quarter ended
April 30, 2006 benefited by $284,000 from a reduction in state tax
liability.
As of April 30, 2006, Catalyst had cash, cash equivalents and
short-term investments of $29.1 million, a decrease of $3.8 million
compared to January 31, 2006. The decrease in cash was primarily
attributable to the purchase of a building for $3.7 million to serve
as Catalyst's future headquarters facility and stock repurchases of
388,184 shares at a cost of $1,920,000, or an average cost of $4.95
per share. During fiscal 2006, Catalyst repurchased 912,943 shares at
a total cost of $4,503,000, or $4.93 per share.
The company had previously provided a preliminary estimate of
fourth quarter revenues but reporting of final results had been
delayed by complications encountered in the recent implementation of a
more sophisticated inventory tracking and cost accounting system. The
system significantly improved our ability to track and monitor
inventory quantities, but its implementation resulted in unanticipated
delays in closing our books and completing our assessment of the
effectiveness of the company's internal control over financial
reporting as required by the Sarbanes-Oxley Act under Section 404.
Management Comments & Outlook
"While we are pleased to record our 8th consecutive fiscal year of
profitability, we are nevertheless concerned about the continuing
pricing pressure on our serial EEPROM product line. We continue to
focus our attention on cost reduction programs for this particular
product line and the volume from our new process platform is picking
up.
"Despite fluctuations on a quarter to quarter basis, we are
encouraged by the revenue increase achieved for our line of
analog/mixed signal products, which totaled $4.6 million in revenues
for fiscal 2006 compared to $2.9 million for fiscal 2005. We are
increasing the pace of new product introductions, coupled with
increasing marketing efforts and design wins, to accelerate our rate
of success in the coming quarters," said Gelu Voicu, president and
chief executive officer.
Investor Conference Call
Catalyst will conduct a conference call regarding the fourth
fiscal quarter results beginning at 2:00 p.m. (Pacific Time) today.
The call will be available to all investors and media via the
company's Web site, www.catsemi.com, at www.fulldisclosure.com, or by
dialing (877) 754-9851 (domestic only). International callers can dial
(706) 643-1107. A replay of the call will be aired from approximately
4:00 p.m. today until midnight (Eastern) on July 28, 2006 at the
company's Web site or by dialing (800) 642-1687 (domestic) or (706)
645-9291 (international), entering reservation number 9700472 and
following operator instructions.
About Catalyst Semiconductor
Founded in 1985, Catalyst Semiconductor, Inc. is headquartered in
Sunnyvale, California. Catalyst designs and markets a broad range of
programmable products including Serial and Parallel EEPROMs with I2C,
SPI and Microwire interfaces, Flash Memories, NVRAM, Digitally
Programmable Potentiometers, Microcontroller Supervisory circuits and
other programmable Analog/Mixed Signal products. Catalyst products are
used in telecommunications, networking systems, computation,
automotive, industrial and consumer markets. Typical applications
include optical networks, modems, wireless LANs, network cards, PC
BIOS, DIMM modules, cellular telephones, digital satellite box
receivers, set-top boxes and Internet routers. Catalyst's Quality
Management System is ISO 9001 certified. For additional information
about Catalyst Semiconductor, visit our web site at
www.catalyst-semiconductor.com
Forward-Looking Statements
Certain statements in this press release, including statements
regarding future market conditions, new product offerings, demand for
products, and increasing revenues, particularly from analog/mixed
signal products, are forward looking statements that are subject to
risks and uncertainties. These risks and uncertainties, which could
cause Catalyst's results to differ materially from the forward-looking
statements and include, without limitation: declining market
acceptance and demand for Catalyst's products; increased competition
in the markets for Catalyst's products leading to decreased average
selling prices; a decline in the growth of the markets for Catalyst's
products; potential errors, latent defects, design flaws or other
problems with any of Catalyst's products; volatility in supply and
demand for Catalyst's products, which would adversely affect revenues
and market prices; price and availability of foundry services,
assembly and test subcontract capacity, which are required to meet
Catalyst's financial targets and/or meet backlog requirements; timing,
future development, cost and market acceptance of Catalyst's new
products and the other risks detailed from time to time in Catalyst's
Securities and Exchange Commission filings and reports, including, but
not limited to, Catalyst's annual report filed on Form 10-K and
quarterly reports filed on Form 10-Q. Catalyst disclaims any
obligation to update information contained in any forward looking
statement.
CATALYST SEMICONDUCTOR, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
April 30, April 30,
2006 2005
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 7,730 $10,978
Short term investments 21,409 22,815
Accounts receivable, net 9,502 9,966
Inventories 14,262 11,455
Other current assets 3,255 5,063
-------- --------
Total current assets 56,158 60,277
Property and equipment, net 9,408 5,582
Deferred tax assets 4,759 4,128
Other assets 95 74
-------- --------
Total assets $70,420 $70,061
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,596 $ 6,069
Accrued expenses 3,002 4,245
Deferred gross profit on shipments to
distributors 2,292 1,879
-------- --------
Total current liabilities 12,890 12,193
Total stockholders' equity 57,530 57,868
-------- --------
Total liabilities and stockholders' equity $70,420 $70,061
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Three Months Twelve Months
Ended Ended
----------------- -----------------
April April April April
30, 30, 30, 30,
2006 2005 2006 2005
-------- -------- -------- --------
Net revenues $14,187 $16,325 $60,217 $62,320
Cost of revenues 9,241 10,140 36,900 35,852
-------- -------- -------- --------
Gross profit 4,946 6,185 23,317 26,468
Operating expenses:
Research and development 1,783 1,895 7,472 7,910
Selling, general and
administration 3,446 3,783 13,445 13,696
-------- -------- -------- --------
Income (loss) from operations (283) 507 2,400 4,862
Interest income, net 337 227 1,175 732
-------- -------- -------- --------
Income before income taxes 54 734 3,575 5,594
Income tax provision (benefit) (216) 218 1,019 1,773
-------- -------- -------- --------
Net income $ 270 $ 516 $ 2,556 $ 3,821
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Net income per share:
Basic $ 0.02 $ 0.03 $ 0.15 $ 0.22
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Diluted $ 0.02 $ 0.03 $ 0.14 $ 0.20
======== ======== ======== ========
Weighted average common shares:
outstanding:
Basic 16,432 17,104 16,685 17,507
======== ======== ======== ========
Diluted 17,880 18,767 18,220 19,485
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CONTACT: Catalyst Semiconductor, Inc.
Rosa Vasquez, 408-542-1051 (Investor Relations)
rosa.vasquez@catsemi.com
fax: 408-542-1405